Intel claims 2-year lead over AMD’s 45nm CPUs

Wolfgang Gruener, 3rd May 2007

New York (NY) – Intel is betting large parts of its business for the next two years on its upcoming 45 nm process technology. At an analyst meeting today in New York, the company updated its vision on how to “return to innovation” and showed confidence that its 45 nm technology is “18 to 24 months ahead of the competition.”

Technology presentations in the financial community always have to be taken with a grain of salt. Stock prices today depend heavily on comments, believes and estimates of Wall Street, so it isn’t really a surprise that flowery pictures are painted at these events.

In the case of Intel, the company has been waiting for some time now for more favorable comments: While the financial performance of the company is picking up and the product lineup appears to be the strongest in more than a decade, the stock isn’t moving much these days and currently is in the same territory as it was in 1997.

Chief executive Paul Otellini took morning tried once again to convince analysts about the value and prospects of the company that exists today and the Intel we will see three or four years down the road. The key message was that the company isn’t willing to give up the technological lead it has gained over AMD within the past year, but accelerate its efforts to improve its market positioning.

To do so, the company will have an increased focus on cost when designing its products on the one side, which is also reflected by Otellini’s statement that Intel will be reducing the number of employees over the course of this year. The company already shed about 10,000 workers, down to 92,000 from about 103,000, in the past six months and more reductions apparently are on their way.

On the other, there is the firm’s 45 nm technology which Intel hopes will enable the firm to create new market opportunities that will secure growth for the firm over the next years. Otellini said that Intel is putting a structure in place that will bring 45 nm products faster to market than any other process technology before: Within three quarters of launch, the company will ship more 45 nm CPUs than 65 nm units, which will account for 100% of Intel’s processor shipments by the end of this year.

“In 45 nm, we have at least a 18 to 24 month lead versus anyone else out there,” Otellini said. According to Otellini, not all 45 nm technologies will be the same and he indicated that Intel will do everything it can to keep the lead once the competition catches up. AMD previously said that it is aiming to introduce 45 nm processors in the second or third quarter of 2008.

While not going into detail, Otellini confirmed that the production of 45 nm processors is on track, with five models (three dual-cores for mobile, DP server and desktop as well as two quad-cores for DP server and the desktop) planned for release later this year or early 2008. The executive also showed a 300 mm wafer with a total of 2500 45 nm “Silverthorne” processors, which will represent Intel’s offering for UMPCs and Mobile Internet devices in 2008 and beyond. “Silverthorne is the most cost efficient processor since the 286. But it is about 100 times faster.”